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  • Ak92
    Ak92 Posts: 36 Forumite
    Hello this may seem like a stupid question but I'd thought I'd ask anyway. The Flex direct account says it will pay 5% on the first £2500 for 12 months. I currently have £1500.13 in the account. 13p interest. It will take me till end of the month to put another £1000 in the account. Will I still get 5% if the account balance is £2500.13. So including any interest accrued until the end of the month?
  • eskbanker
    eskbanker Posts: 30,378
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    Ak92 wrote: »
    Hello this may seem like a stupid question but I'd thought I'd ask anyway. The Flex direct account says it will pay 5% on the first £2500 for 12 months. I currently have £1500.13 in the account. 13p interest. It will take me till end of the month to put another £1000 in the account. Will I still get 5% if the account balance is £2500.13. So including any interest accrued until the end of the month?
    Interest is calculated on a daily basis using the gross rate of 4.89% (which compounds to 5% over the year), i.e. each day you effectively earn balance x 4.89% / 365.

    If the balance exceeds £2,500 on any days then you still earn interest on £2,500, but obviously for any day where the balance is lower than £2,500 then you'll earn less interest on those days.
  • Steve_xx
    Steve_xx Posts: 6,970
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    edited 4 March 2018 at 7:04PM
    Ak92 wrote: »
    Hello this may seem like a stupid question but I'd thought I'd ask anyway. The Flex direct account says it will pay 5% on the first £2500 for 12 months. I currently have £1500.13 in the account. 13p interest. It will take me till end of the month to put another £1000 in the account. Will I still get 5% if the account balance is £2500.13. So including any interest accrued until the end of the month?

    It reads to me like you will not get interest on the 13p once the balance tips over 2500.
  • Emily_Joy
    Emily_Joy Posts: 1,208
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    edited 4 March 2018 at 7:36PM
    Steve_xx wrote: »
    It reads to me like you will not get interest on the 13p once the balance tips over 2500.
    eskbanker wrote: »
    Interest is calculated on a daily basis using the gross rate of 4.89% (which compounds to 5% over the year), i.e. each day you effectively earn balance x 4.89% / 365.

    If the balance exceeds £2,500 on any days then you still earn interest on £2,500, but obviously for any day where the balance is lower than £2,500 then you'll earn less interest on those days.

    The above is wrong. From the Nationwide website:
    You'll earn interest on the first £2,500 of your balance each month but you won't get any interest on any part of your balance over £2,500.

    That is, you don't get any interest on the day when your balance is £2500.13
  • Curls2208
    Curls2208 Posts: 200
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    Nah it's just the 13p you won't get interest on. You'd still get the interest on the £2,500.
  • RG2015
    RG2015 Posts: 5,816
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    eskbanker wrote: »
    Interest is calculated on a daily basis using the gross rate of 4.89% (which compounds to 5% over the year), i.e. each day you effectively earn balance x 4.89% / 365.

    If the balance exceeds £2,500 on any days then you still earn interest on £2,500, but obviously for any day where the balance is lower than £2,500 then you'll earn less interest on those days.
    Steve_xx wrote: »
    It reads to me like you will not get interest on the 13p once the balance tips over 2500.
    Emily_Joy wrote: »
    The above is wrong. From the Nationwide website:
    You'll earn interest on the first £2,500 of your balance each month but you won't get any interest on any part of your balance over £2,500.

    That is, you don't get any interest on the day when your balance is £2500.13
    Hi Emily Joy,

    Unfortunately this is incorrect and the previous two posters are correct.

    I have a Nationwide Flexdirect account and my monthly interest is calculated on up to £2500 every day irrespective of whether £2500 is exceeded or not.
  • polymaff
    polymaff Posts: 3,903
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    edited 4 March 2018 at 8:06PM
    Emily_Joy wrote: »
    ... You'll earn interest on the first £2,500 of your balance each month but you won't get any interest on any part of your balance over £2,500.

    So you WILL get interest on that part of your balance NOT over £2,500.

    EDIT: And one does.
  • stehouk
    stehouk Posts: 412
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    Ak92 wrote: »
    Hello this may seem like a stupid question but I'd thought I'd ask anyway. The Flex direct account says it will pay 5% on the first £2500 for 12 months. I currently have £1500.13 in the account. 13p interest. It will take me till end of the month to put another £1000 in the account. Will I still get 5% if the account balance is £2500.13. So including any interest accrued until the end of the month?

    Wait til 1st april to deposit another £1K otherwise you will have to pay in another 1k in april to qualify for the interest, if it is going to take most of the month to pay it in anyway you won't make much interest on it in march
  • stehouk
    stehouk Posts: 412
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    Does that make sense, i paid in £1500 on the 27th feb and then £1250 1st march so i don't have to put another £1000 in until april and i get all march interest on £2.500 (plus £250 for the reg 5% saver)
  • EachPenny
    EachPenny Posts: 12,239
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    stehouk wrote: »
    Wait til 1st april to deposit another £1K otherwise you will have to pay in another 1k in april to qualify for the interest, if it is going to take most of the month to pay it in anyway you won't make much interest on it in march
    stehouk wrote: »
    Does that make sense, i paid in £1500 on the 27th feb and then £1250 1st march so i don't have to put another £1000 in until april and i get all march interest on £2.500 (plus £250 for the reg 5% saver)

    No, the best strategy is to pay as much of the £2500 as possible in as quickly as you can. Then wait until April, withdraw £1000 into a non-Nationwide account and then pay that £1000 straight back in again. Which can be done with a pair of standing orders if you are confident with setting them up.
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